Streamlining Financial Reporting- FIRST

AGA-PDC, NashvilleJune 26, 2006David Burgman

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Financial Statements

5 CFO Act Agency disclaimers last year. Agency re-statements 10 straight disclaimers on the FR. A general lack of confidence in federal

financial statements.

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Financial Report of the United States Government (FR)

Serious financial management problems at the Department of Defense.

The federal government’s inability to adequately account for and reconcile intragovernmental activity and balances between federal agencies

The federal government’s ineffective process for preparing the consolidated financial statements

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Central Accounting and Reporting: Successes

Monthly reporting that classifies disbursements and collections within 3 work days: great improvements in timeliness and accuracy

FACTS II: tremendous improvements in consistency of budget execution reporting.

What makes them successful?

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Central Accounting and Reporting: Not So Successful

Financial Statements. Reporting Inconsistencies. Elimination differences, FBWT, Non-expenditure

transfers, USSGL. 16 years since the CFO Act became law.

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What makes FACTS II (Budgetary Reporting) Successful?

Collects USSGL-based trial balances. Fulfills several needs of both Treasury and

OMB. Uses a single data stream for multiple purposes. Has tight edits to ensure consistent reporting. Provides a feedback through edits and

validations

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FY2005 PrioritiesCFO Sub-Council - Financial Statement Acceleration Committee

(Now - Central Reporting Transformation Team )

Intragovernmental Reconciliations

Consolidate and Streamline Agency Reporting to Treasury and OMB

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Three Subgroups Buy/Sell Transfers Fiduciary (Investments)

Revised Business Rules for Intragovernmental Transactions

Intragovernmental Reconciliations Subcommittee

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Agencies are required to prepare and submit financial information to central agencies : In a variety of formats and groupings, At multiple dates throughout the year, With varying levels of assurance Using many stove-piped systems, each requiring separate passwords

and pins

The “corporate financial reporting process” is complex, labor-intensive and time-consuming and not yielding the desired results

Pre-existing requirements are seldom removed or consolidated

New or modified requirements are added on an annual basis without sufficient notification

Financial Reporting Streamlining Subcommittee – Current Issues

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Specific consolidation or eliminating duplicative processes Streamline Budgetary reporting by using GWA data to populate FACTS II

earlier Consolidate and enhance financial reporting systems to better support

intragovermental reconciliations Either use FACTS I to populate the closing package or eliminate duplicative

reporting

Recommendations that can be implemented immediately: Develop consolidated governmentwide financial reporting calendar Consolidate all central agency financial reporting requirements in one place Consolidate related certifications and assertions over financial information

submitted to central agencies

Specific Recommendations continued…

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We Still Have a Problem!

Lack of Standardization Stove Pipe reporting systems Lack of integration Timing Differences Variety of Formats and Groupings

Inconsistent Data From the Agencies

The “corporate financial reporting process” is complex, labor-intensive and time-consuming and not yielding the desired results

Bottom-line…………..

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What Can FMS Do?

Long Term Approach

Current Efforts Underway

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What is FIRST?

USSGL Database -

SID

Government Financial Reporting System - GFRS

USSGL based

Reporting -ATB

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SID USSGL Accounts and Definitions

Account Number: 4119 Account Title: Other Appropriations Realized Normal Balance: Debit Definition: All other appropriations not classified above. Additionally, this

account may include the annualized amount of appropriations for continuing resolutions.

Related Links:

Transactions Attributes Crosswalks

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SID

Transaction results for: Account Number 4119 Total Results Found: 7

A104 To record the enactment of appropriations.A125 To record a reduction in authority for advance funding made available in the previous yea... A155 To record an appropriation to liquidate obligations initially incurred against the author... A196 To record the annualized level of an appropriation provided under a continuing resolution.

A199 To record an adjustment to the annualized level of an appropriation when the enacted leve... F108 To record the reduction of permanent indefinite resources when a warrant is received.F302 To record the consolidation of actual net-funded resources and reductions for withdrawn f...

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GFRS Re-class Module

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GFRS Re-class Module

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FIRST- ATB

Streamlines central budgetary and financial reporting

Will replace FACTS I and II, IFCS, IRAS, and part of TROR.

Will provide a mechanism to implement the tie-points on a government-wide scale.

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Must Have Integration!

USSGL Database -

SID

Government Financial Reporting System - GFRS

USSGL based

Reporting -ATB

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The Long Haul – Need the Right Foundation

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UNITED STATES STANDARD

GENERAL LEDGER(USSGL)

Budgetary Accounting

Financial Accounting

Intragovernmental Accounting

Cash Accounting

Agency Accounting

USSGL - The Key to Consistency

Central Accounting

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Current Central Accounting and Reporting Systems

FA

CT

S I

I

Cent

ral

Acco

untin

gDa

taST

AR/

GW

AMP

Agency Reporting Stovepipe Systems

GF

RS

FA

CT

S I

IRA

S/

IFC

S

TR

OR

Financial Reporting Systems

Budgetary Reporting System

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How will FIRST Work?

One integrated Adjusted Trial Balance (ATB) that includes both Proprietary and Budgetary for each and every Treasury Account Symbol (TAS).

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Level of Detail

FMS will collect quarterly trial balances, beginning and ending, budgetary and proprietary.

Treasury Account Symbol level. This is the level at which receipts,

disbursements, warrants, NETs and other transactions are posted in the central accounting system.

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One Integrated Trial Balance

One trial balance for each unique occurrence.

Agency Identifier Allocation Transfer Agency Identifier Beginning Period of Availability Ending Period of Availability Availability Indicator Main Account Code

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Edits, Validations and Feedback

FMS collects agency data through many systems, and posts some transactions, such as warrants and non-expenditure transfers, directly.

All this data resides in the central accounting system.

Wherever possible, FMS intends to use this authoritative data to edit trial balances.

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FIRST

Agency Accounting

Systems

FIRST

GFRS

USSGL based

Reporting

Financial Report

of the

U. S. Government

Agency FinancialStatements

USSGL database

Feedback loop

STAR/GWA

Financial Information and Reporting Standardization

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Expected Benefits

Streamlined reporting for the agencies Consistent reporting to FMS regardless of

reporting mechanism. Substantial reduction in intra-governmental

elimination differences Dramatically improved Financial Report of the

U. S. Government. Ease of use of the USSGL for agencies.

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…Expected Results continued

Full benefits of USSGL. Improved quality of financial information. Logical, long range approach that attacks core

problems. Reduction in FMS and agency resources

required for maintenance and reporting functions.

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Development Approach

Enhance Government off-the shelf (GOTS)

Collects detailed USSGL-based data each month from all Treasury bureaus at fund symbol level.

Contains many consistency checks. Used to produce their Agency Financial Statements Used to create agency submissions for FI, FII, IRAS and

GFRS reporting. Oracle database

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Phased Approach of FIRST

Phase 1: Put the USSGL in a database (In progress)

Phase 2: Continue to enhance GFRS. (In progress).

Phase 3: ATB Development

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Current Status … Next Steps

Timeline Agency Involvement List of areas to be reviewed Interim Efforts (Use of Central Accounting Data)

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So What About ME? The Good, the Bad and the Ugly Another Treasury system…….. What do I need to do and when? How is this going to help the agencies? Do I really need to provide just one ATB? Does it have to adhere to the USSGL?

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The Future… Could there be more?

By the year 2011, FACTS I, FACTS II, IFCS, IRAS and part of TROR will be replace by FIRST.

Quarterly USSGL trial balances with budgetary and proprietary beginning and ending data for every TAS will be reported to FMS.

Agency trial balance data will subject to a variety of of SGL edits and validations, including checks for consistency with the central accounting system.

Trial balance data will be compared to GFRS data for consistency.

What about Audited Financial Statements and the Closing Package?

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Financial Reporting - Current Processes

OMB

Agency Financial Statements

OMB Check-

list

Agency Financial Statements

GFRS Check-

list

GFRS

STAR/GWA

STAR/GWA

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Financial Reporting - Possible Future Process

Feedback

File

Submission

Agency Financial Statements/Data

FIRST/GFRS

Standard

Format

OMB

STAR/GWA

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Questions???

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For More Information on FIRST

David Burgman, Project Director 202-874-8538 David.Burgman@fms.treas.gov

Jeff Hoge, Director 202-874-6179 Jeff.Hoge@fms.treas.gov

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Questions???